“The hits just keep coming for Boeing on operational 787 issues, with this
grounding the most dramatic action we’ve seen yet,” says Robert Stallard, an
analyst at RBC Capital Markets. “What started as a series of relatively minor,
isolated incidents now threatens to overhang Boeing until it can return
confidence.”

"Shares recently fell 3.5% to $74.27. The stock, which has had a choppy start to
the year, is up 11% since June and roughly flat over the last 12 months.

Yesterday’s emergency landing followed a series of similar technical issues
that occurred just days ago, including a fire on a plane in Boston.

“Alarms indicated smoke in the forward area of the plane, which houses
batteries and other equipment, the airline said, and there was a “burning-like
smell” in the cockpit and parts of the cabin. The plane landed at Takamatsu
airport in western Japan, where the 129 passengers were evacuated using the
plane’s emergency chutes. The plane also carried eight crew members.

“ANA said that the exact cause was still undetermined. The event was
designated as a “serious incident” by Japan’s transport ministry, setting off an
immediate investigation by the Japan Transport Safety Board, which dispatched a
team to the scene.”

The latest incident prompted Goldman
Sachs to remove Boeing from its “conviction
list,” although it still retained its buy rating on Boeing. Goldman says it
remains bullish on the fundamentals of the commercial aerospace sector, and
thinks Boeing’s valuation is still attractive. That said:

“We also recognize that there have now been two incidents in a very short
window pointing to potential issues related to one part – lithium ion batteries
– and the concentration and possible overlap of cause within these events
heightens the risk of a potentially more meaningful required change to the
aircraft and therefore a possible delay in the pace of the production ramp. This
would make near-term outperformance of shares more difficult to
see.”

Other analysts are also growing increasingly frustrated. “We’d hoped recent
787 incidents were an aberration and that Boeing would overcome them relatively
quickly,” Oppenheimer says. “But following yesterday’s incident…we think
resolving recent issues will take not just time, but credible answers and
prescriptions. The FAA’s investigation should provide these, but will take
months.

“In the interim, BA is probably range-bound.”"Summing UpAs a long term investor, I like Boeing very much. And due to the "headline risk," its shares are down another 3% today. That said, they may stay low for some months to come as well.Trying to catch a falling knife is hard to do, so short term traders beware. Long term investors should take a long look at establishing a position in the company.Meanwhile, its current dividend yield is 2.6% and it's the best company in the worldwide commercial aerospace industry.Boeing has a solid financial outlook and a world class management team as well.Thanks. Bob.